tv [untitled] December 9, 2012 2:00pm-2:30pm PST
colleagues for waiting on that one. item 14, please. >> item number 14, hearing request to better understand the city's efforts to organize and manage the usage of city property and to coordinate and acquire space for the city's operational needs that may include information from the department of real estate, port, san francisco municipal transportation agency, san francisco public utilities commission, and other departments. >> thank you very much. we have john updike from the department of real estate on this item. this actually was an item or hearing that i requested for real estate, as we have many different pieces of legislation that flow through the budget and finance committee. we often saw many different leases that came before us, oftentimes they came with a level of urgency and yet there was really not a context behind why we were moving forward so quickly on some of these items or why sometimes things came to us retroactively when it came to real estate. similarly, we have heard a lot about the need for space, but haven't really understood sort of the totality of the space that we have, what we occupy,
and where the city sees our self-going in the future with regards to space. the city's land issues and real estate issues are actually very complicated. sometimes we are the landowner, sometimes we're the tenants. sometimes we are actually the landowners and parcels outside the city to help provide easements for our water system among other things. so, it is very complicated with regards to real estate. and, so, what i thought we would do in this hearing is really to start off the conversation on real estate. so, what i've asked john updike to do in this presentation because there are so many different tangents we can go on real estate, is to really provide sort of an overview about what it is that we do have in our portfolio, who generally manages it, some of the things and strategies that real estate is working on at the moment and what it is that we might be able to expect going forward. and i would imagine from this conversation it may spark additional questions from the committee. it may spark additional interest for hearings in different and specific pieces within the real estate system.
so, with that i'd like to turn that over, the presentation over to john. >> thank you, chair chu and members of the committee. john updike, director of real estate. i believe -- no, okay. i'll take it from here, thank you, kate howard. so, thanks for the opportunity to give go over our real estate portfolio, give you some background. as the chair mentioned, this is really a lot of facts and figures to get you well grounded in the real estate portfolio and probably will lead to a series of discussions on other real estate-related matters. so, the city of san francisco real hayes one of the largest and most diverse land holdings within the city. to give you that context, there are a little over 200,000 parcels, making up 31,000 acres of land in the city, that's excluding the streets which of course the city also controls.
so, of those parcels, 2000 of them are in ownership by the city of san francisco. that's almost 6,000 acres, actually it's a little more than 6,000 acres. that means we have ownership of 20% of the acreage within the city and county of san francisco. we also own land far beyond the city. i'll get into that in a bit. but 92,000 acres of land is owned outside of the county. so, our portfolio is not only diverse, it's vast. so, that's speaking to the land mass that we own when we talk about the buildings that we control, we have over 1,100 separate buildings over seven counties. that's totaling about 48 million square feet of improvements throughout that entire portfolio. and interestingly, 85% of that
48 million square feet is controlled by seven different departments. so, the majority -- and you see the pie chart before you -- is the port at 32% of those holdings. this is by square footage of improvements. the airport has 24%. gsa or administrative services, of which real estate is a part, has 11%. and on down the line. another major holder mainly as a result of the recent transfer of assets, those that are housing from the successor agency to the mayor's office of housing, they now rise to actually 4%. so, they actually have a holding that is greater than recreation and park department now. that's new data, didn't manage to get that in the pie chart, but you get a sense of that. the other category is -- that's a wide range of different departments with smaller holdings. >> so, john, i would imagine this would probably be flipped if we were talking about actual
landowner ship because the puc has a lot of land, but not very many buildings, right? >> that's exactly correct. the holdings of the majority owner of that 92,000 acres outside of the county. some are improved, but most are not. that's exactly right. so, on to more facts and figures. just to give you a sense of what real estate touches within that portfolio, less than 10% is actually served by real estate in one way or another. so, we touch about 40 million square feet. that also has a wide range. in some cases it's the delivery of full service, everything. utilities, janitorial, security, this building is really a perfect example of that with the sole exception of security being provided through a work order basis with the sheriff's department. so, there are many different slices of that in some locations. we simply provide janitorial service. in other locations we provide engineering resources. some are obtained directly.
they also provide contracting mechanisms to handle elevator services, for instance, and that's across many of the portfolio department ownerships. in addition, real estate provides really a brokerage capacity for the city's general fund. for those departments that don't have a real estate aspect to their staffing, they turn to real estate almost on a consultant basis. we also provide that service and particularly appraisal and title services to other departments that do have real estate services, but they don't have that aspect, those technical parts of putting a real estate deal together. so, that spoke to the ownership side. i want to briefly touch on the lease side. the city leases over 2 million square feet of privately owned space. to give you context, we earlier noted 48 million square feet of
ownership, 2 million square feet leased. so, 4% of our portfolio is leased, 96% of it we own. there's a lot of small leases. so, while that's that number does not sound great, it's made up of everything down to a thousand square feet or less. -- some some locations. so, we have over 100 leases. * those run the gamut from office, clinic, residential, social, training sites for various purposes, and some of our industrial needs are met through leasing. i want to give you sort of a snapshot of what's ahead. interestingly, over the next 16 months or so, we're probably going to see -- you've already seen some of these items, about a half million square feet. so, nearly one quarter of our lease portfolio is going to be before the board during the coming year. now, you've seen some of that in terms of some civic center reorganization that we're doing just very recently within the
last month. but you'll see additional pieces of that puzzle come forward. what we've been strategically working on over the past few years is trying to even out what has been a very ebb and flow of leases where we have these spikes of years with many transactions to manage and then other years with few. and given we're using staff resources, we're trying to manage that out. the reflection of that is the fact that in the next eight years, from 2014 to 20 22, we only have scheduled 350 thou square feet of lease up for renewal termination * . so, that reflects the evening of our portfolio. and that's really driven by staggering the lease terms. so, you've seen lease terms that are a little bit varied, we're not always bringing you the five-year lease with five-year option. in some cases we're strategically adjusting that. >> john, just so i know in terms of the 2 million square feet of space, about half a million of that is going to be coming up for renewal or
replacement very soon. so, those leases are expiring. we are going to be expecting to see through the budget committee all of those leases come before us, right? >> they're either expiring or they're up for renewal which is a much more simplified process. >> right. so, those will be coming before us. you're saying every time you're bringing back a lease for renewal, you're taking a look at the terms. sometimes you're coming back with three-year terms, sometimes five-year terms, just to space out the amount of turn over we have or when leases expire so they don't all expire at one time, correct? >> that's correct. >> and just so i know, one of the things i always had a question about was we have 2 million square feet of space that we're currently -- that we currently have leased, correct? and what is our need, though? and, so, we have this amount of space. we're going to be coming back with renewals that come back. but the outstanding question is generally do we have adequate space as it is, or are we simply just trying to maintain the space or do we have to transition to an ownership? is that the position the city is in or are we seeing
ourselves growing or in need of growing space which is fundamentally something i think would be good to under. >> and i'll get to that in a couple of future slides. really good question. i think we can dive a little deeper into that definitely. so, going forward here, just a quick snapshot of that leased portfolio, again, i mentioned over 100 leases, it runs the gamut from a nonprofit theater operation, retail space, to offices, to cafes, here in city hall, that's a liesmanaged by real estate, to telecommunications facilities. and you look at your agenda today and you see a number of items that had some underlying real estate items. in some cases real estate provided some assistance and in some cases real estate had no [speaker not understood] whatsoever. depending on the department providing a presentation and their charter authority. speaking to that, there is a host of additional leases that are managed and delivered by
other departments, some of which come before the board of supervisors, some of which do not have to. as with commission or board approval, by those separate entities, they can enact leases. i highlighted the major players in that regard in terms of rec/park port, the mta the puc and the airport. and those are also the ones that have a fairly self-sustaining real estate arm to be able to manage their transactions. so, in that regard, we provide a brokerage service when it comes to leasing, purchasing, disposing of assets for the general fund family. we also provide a consultant role to all of these departments listed. i want to very briefly just touch on each department and indicate some of the different assistive processes that real estate provides to these groups.
so, for the sfpuc, they have a very large staff to provide the ir internal transaction needs addressed in the out of counties area. they have quite a large portfolio to manage. occasionally, item need board approval. i'm here to assist in that and my staff to bring it forward through board approval. on occasion, they also have facility requirements. golden gate is a good example. we have a partnership of a mix of services provided by real estate staff and services provided by the puc to manage that building. the airport, again, very self-sustained, only on occasion needing